MUMBAI :
After two extensions and revisions, the Reserve Financial institution of India’s (RBI’s) new norms on present account opening have as soon as once more left bankers and prospects confused as many banks have already complied with the sooner deadline of 31 October, in line with bankers.
RBI’s authentic pointers had requested banks to not open present accounts for debtors with little or no mortgage publicity. This led to banks closing many accounts particularly these with publicity beneath ₹5 crore or freezing the accounts. Nevertheless, below the brand new pointers launched final week, RBI has eliminated these restrictions and allowed banks to open present accounts with any borrower, the place the publicity of the banking system is lower than ₹5 crore.
“RBI’s new pointers have come after a number of documentation has already occurred for closing these accounts. Small debtors have been hit probably the most as we’ve closed these accounts. The bigger accounts and authorities accounts have both been transformed into CC/OD (money credit score/overdraft) accounts or assortment accounts,” mentioned a senior banker with a big public sector financial institution.
“We’ll now need to do KYC (know your buyer) over again and open these accounts. Lots of the prospects would have revised their money circulation administration and saved their present account with one financial institution,” mentioned one other banker.
Banks and RBI had been in discussions to calm down these norms since they have been launched in August 2020. These directives have been geared toward cracking down on makes an attempt by debtors utilizing present accounts at non-lending banks to siphon off funds.
The central financial institution had prolonged the unique deadline of 31 July to 31 October after bankers expressed stiff opposition from prospects and authorities enterprises of their makes an attempt to freeze non-compliant present accounts. These businesses have been threatening to cease doing authorities enterprise with banks in the event that they closed these accounts.
Below the revised round, the Reserve Financial institution of India has additionally eliminated restrictions on all India monetary establishments and accounts opened below particular directions of central authorities and state governments.
Nevertheless, restrictions nonetheless proceed within the case of public sector enterprises.
Below the revised pointers, debtors with greater than ₹5 crore publicity can keep present accounts with any one of many banks with which it has CC/OD facility, offered that the financial institution has no less than 10% of the publicity of the banking system to that borrower.
Supply: Live Mint